Beans Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $162,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 60,000 direct labor-hours. Recently, Job K818 was completed with the following characteristics:Number of units in the job10Total direct labor-hours50Direct materials$ 920Direct labor cost$ 1,400The predetermined overhead rate is closest to:
A. $8.30 per direct labor-hour
B. $2.80 per direct labor-hour
C. $2.70 per direct labor-hour
D. $5.50 per direct labor-hour
Answer: D
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